Part markups by service shops

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What is the norm in part price markups by service shops if there is such a norm at all? I get the impression that part markups are a major source of income for many shops. That would explain why they frown upon
customers bringing their own parts. I'd prefer they'd rely on their labor for that, not from being a part merchant.
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wrote:

There's a dealership around here that uses their own internal part numbers, so you can't take your invoice and shop around for the parts.
It's big business.
Indy shops generally are happy to use your own parts--but I let them take care of it anyway, since that puts the whole repair on their shoulders. As long as they're being honest about it, I go ahead and give them all the business.
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Would you go to a restaurant with your own food and ask them to prepare it?
Erik
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On 03/23/2012 11:11 PM, Erik wrote:

for some high end restaurants, if you go with your own pheasant or wild boar, they'll do it for you. [call ahead of course, and be a regular.] and you can go with your own wine. yes, you still pay, but they'll do it. particularly if there's some extra for the chef.
--
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On 3/23/2012 11:11 PM, Erik wrote:

It's not the same thing because mechanics already charge quite a high price for their labor which should be more than enough to live on. But in any case, I am not so much agains any markup per se. I was just wondering if there was some kind of industry standard for such markup.
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cameo wrote:

Down in these heeyah pawts... It's 50%
JT
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How do you know it "should be more than enough to live on"?
You've never actually run a business, have you? You have no idea what sort of net margins businesses make, do you?

What I said before.
--
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For OE parts... Depending on their relationship with the dealer they're buying from, they'll get between 10% and 30% off full-retail. They then add that back when they re-sell to you. That way they stay competitive with the dealers for parts retail prices.
You may not like paying a markup on parts and supplies, but that's the way it works everywhere, not just in auto repair.
If garages could not mark up parts, they'd increase their labor charges to compensate, and you'd be even more unhappy.
--
Tegger

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On 3/24/2012 5:06 AM, Tegger wrote:

OK, I would say that would be reasonable.

Labor charges are high already as they are. My question was prompted by the conversation I had with my independent mechanic about the heater core's upcoming replacement. As it turned out, the current core was installed five years ago, not 2-3 years ago as I recalled. He said the labor cost for that would be around $600. When I mentioned that perhaps using a rebuilt core last time wasn't such a good idea and this time I'd like to have a new OEM core installed. But because the Honda dealers charge over $600 for the core, I'd like to get one myself from an online Honda dealer for $300 and that's what I'd like him to install. He said he could probably get the same OEM core from his supplier even cheaper, then looked up his supplier's catalog and mentioned something like $185 or so. But then he would have to charge me $400 for it. When I mentioned that it was not really cheaper for me, he just replied flippantly: "I have to make a living, too." He also said that those cores are all new OEM anyway, because cores are not rebuilt. Funny though, because I seem to remember that last time he collected the old core to be returned to the original supplier for exchange. Why, if not for rebuild?
In any case, he also said that he would replace the old core with one that I brought to him, but I could forget about warranty in that case. Well, if that is not a discouragement to get my own part, I don't know what is. Especially since I don't see much warranty on the current core he installed that is failing after only 5 years. The original core lasted 13 years. I left him by saying that I wanted to postpone this core job for the next scheduled maintenence appointment but I am now seriously considering finding another independent shop. This one is just not the same since the son and the son-on-low took it over from the old guy a few years ago. So I better start looking up mechanics around from checkbook.org list or some such, but boy I hate starting with a new one!
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On 03/24/2012 10:45 AM, cameo wrote:

they may be new, but they won't be new o.e.m. - original equipment manufacturer. there's a bunch of aftermarket manufacturers out there, and they're the ones that sell cheap.

i think he's blowing smoke.

that's ok. honda parts have warranty if professionally installed. up to three years, depending on part.

maybe, but it helps to shop around. either look for old guys that have been around the block, or new kids with something to prove trying to build a clientele. it's the people that take you for granted that you need to avoid.
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On 3/24/2012 7:56 PM, jim beam wrote:

That's what I suspect, too. Is it possible that it was just a fomerly returned failed OEM heater core that was "remanufactured?" He could the still call it OEM, right? I'm just trying to figure out why else would they want to keep the old failed heater core?

Yes, but who wants an already antagonized mechanic install a heater core? He would have then no motivation to do a good job at all. Just the opposite!

Well, I'm already looking.
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On 3/25/2012 2:02 PM, cameo wrote:

There is not much to figure out - the heater core contains aluminum or copper (or both). Shops accumulate hundreds of pounds of iron, copper, and aluminum in the course of a few weeks or months which can bring in a nice chunk of extra change when hauled to the recycle or scrap yard. Around here they pay $3.05 per pound for copper, 55 cents per pound for aluminum and $12.00 per hundred for light iron. It adds up quickly.
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On 03/25/2012 12:55 PM, Al wrote:

you need to shop around - those prices are low. i guarantee there is more than one scrap dealer in your area, so call the others and get quotes. check your weights too.
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On 3/25/2012 12:55 PM, Al wrote:

So it's that simple, huh? So what do they still remanufacture? Alternators?
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On 03/25/2012 11:02 AM, cameo wrote:

no.
remanufactured is not usually called "oem" unless it's labeled as something like "factory remanufactured". it'll be specifically identified with the original manufacturer's name. denso, toyo, or some such.

talking of doing a good job, even aftermarket don't usually fail quite this quickly. i suspect there was damage during fitting.

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On 3/25/2012 1:46 PM, jim beam wrote:

That would be another reason to look for another one then.
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wrote:

Smoke, smoke, smoke. He's blowing it.
My guy will install what I give him, but we both know that if what I give him is bad, I'm on hook for the labor.
My guy will happily use OEM parts if I request, which I generally do. HE wouldn't pay the whole $600 for the part; he'd get it for less, from tthe same dealer, then charge me the $600 for the part. Then he'd install it, then if something went wrong it'd be all on him.
I consider that a fair deal. I get his labor rates plus the convenience of using him instead of a far-away dealer, plus I get to keep a local small business going. I consider it a fair deal.
I honestly believe it's the cheapest man who spends the most. I wouldn't chase after that part for $300 delivered to my door and then hand it to my local guy.
Of course, I also let the local mower shop--who's been around for umpty-dozen years, and who is a professional dealer in Toro, Snapper, Echo, and a few other brands--take care of my lawnmower every winter. Why do that, when I could change the oil and spark plug and sharpen the blade myself? One, I don't really like to do those things anymore--but more important is reason number 2, which I call the "local neighborhood tax". If I don't support these guys, they will go out of business and suddenly I won't *have* a local mower shop, or a local hardware store, or whatever, to go to. These places are invaluable when you need them.
For example, I just got a new Echo Power Attachment System kit w/trimmer and blower, with the idea of getting a pole pruner at the end of the season. I could have gotten it online, or at Home Depot, but the local mower shop is a pro dealer--to the point of having on staff a former Echo service trainer. They know what they're doing, they sell only good stuff that's known to work and not to cause problems, and they service what they sell. They also go the extra mile to unbox and set up and test everything. Same price as anywhere else for this kit, but I got more--plus I got peace of mind.
A couple of weeks ago I passed over the $50 bag of Scott's Step 1 fertilizer at Costco, and instead went to my local hardware store and spent $66 for the same bag. My local hardware store has been around forever, they provide actual service, and they have 95% of what I want. The very idea of stepping into a Home Depot and wandering around hoping to find something resembling what I need is anathema to me.
Besides, since the local hardware store is a small but official Scotts dealer, they have a couple of rebates happening--one from Scotts, one from Ace Hardware. I'll more than make up any Costco savings, just from the rebates. These little guys, they offer things that the big warehouse guys don't.
Likewise, I discovered a local auto service shop two blocks away from me, a guy who's honest and who has done demonstrably good work. He's not the cheapest, but he's no more expensive than the dealer. And he'll tell me if it's something he can't do because it requires something special only the dealer is likely to have. Fantastic.
Oh--and same for this guy and his oil changes. Yeah, he's a tad more expensive--but it's subsidized by rebates from his filter vendor, and that takes it down to LESS than what Iffy Lube charges to ruin your engine after selling you an air filter you didn't need.
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On 03/25/2012 05:00 AM, Elmo P. Shagnasty wrote:

in this case though, the local guy has been using aftermarket inferior parts, and reliability has proven to be a problem. and worse, he doesn't seem capable of accommodating the customer's wishes by using genuine honda parts, even when asked.
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You're probably comparing your own per-hour pay to the shop's labor rate. That's comparing apples to oranges.
Most auto shops don't make a lot of money, and it can be hard to stay afloat with all the competition out there.
What with the occasional slack periods where you still need to keep your guys in the building, to comebacks, to unanticipated time-overruns, to warranty claims, to parts-ordering, to talking to customers who just want to socialize, and many other things, that "high" shop rate gets dissipated pretty quickly.
And I haven't even mentioned capital costs, like new equipment and fixing the existing stuff. It is horribly expensive to equip and maintain a good auto shop.

Something is wrong here. Nobody marks up parts that much. You may have misunderstood him. If he looked up the cheap part in a "catalog", then it was not OE, but was aftermarket. For OE pricing he would have phoned the dealer.
Something is also wrong with your stated pricing. I see a new OE core for a '98 Accord (just to pick one at random) is about $400. Prices for these things vary wildly depending on model and year. Some OE units are closer to $200.

Any number of reasons besides rebuilding. Heater cores are basically just tiny radiators, and nobody rebuilds rads anymore.

Well, sure. You've /already/ got a warranty on that part: You got it from the supplier you bought the part from. And since you're the buyer and the warranty holder, it's going to be /your/ responsibility to go after the supplier if the part fails.
Why should your guy give you a /second/ warranty on a part he didn't even buy?
This issue is just one reason for the markup on parts...

Warranties on parts are typically several months to a year.

If you're going in there arguing about how much stuff should cost, you're more than likely creating your own problems with the garage.
Never argue price with service providers unless you give them industrial-type volumes.
--
Tegger

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On 3/25/2012 6:31 AM, Tegger wrote:

Not really. I know he has other costs that I don't have.

Well, my impression was that competition is supposed to keep prices in check, not being a pressure to raise them.

I agree. I just don't like the markup this mechanic uses on his parts. More than 100%. It looks like he wants to be a parts dealer who occasionally also does some repair.

Well, I'm sorry but that's how it happened. He looked up some catalog of his and stated he could get the same OEM core for $184 or something close to it, bet less than $190. Then when I asked how much the total cost of the job would be, he said the labor would come to about $600 and the core around $400. That's when I asked him how he came up with $400 for that $184 core. His answer: "I have to make a living." To me that markup is unreasonable, that's all.

I know what they are but I assumed they still remanufacture those, hence the core exchange reqirement.

I accept that but with that kind of interest for selling their own parts, I just don't trust they would be motivated to do a good install job with a part I provide.

The issue here was the size of an insustry standard markup.

Which is usually worthless because such parts seldom fail in such a short time.

I didn't really argue after he told me his reason. It was more like an inquiry on my part. The arguing is here, wan't there.
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